Policy Dialogue on “Efficiency and Effectiveness of Public Expenditure Management System in Nepal: Review of Performance and Way Forward”

January 18, 2024

January 18, 2024

At the request of the Office of the Prime Minister and the Council of Ministers, the Policy Research Institute has undertaken a comprehensive study on the topic “Efficiency and Effectiveness of Public Expenditure Management System in Nepal: Review of Performance and Way Forward”. Given the backlog effect of COVID-19 accompanied by a recent tendency of stagflation in the economy affecting private and public investment along with additional resource mobilization problems and mounting public expenditure, the study aims to carry out in-depth analysis on the public expenditure management system. A study team of experts including Dr. Dilli Raj Khanal, Dr. Kalpana Khanal and Mr. Pranjal Rijal has been formed. In this context, the Policy Research Institute organized a public policy dialogue to solicit feedback and suggestions from the members of parliamentary committees (Finance committee, Public Accounts Committee, Infrastructure Development Committee), current and former bureaucrats, National Planning Commission, Ministry of Finance and other line ministries, academics and other experts.

This event was moderated by Senior Research Fellow at Policy Research Institute, Dr. Kalpana Khanal. Opening remarks for the interaction program were given by Mr. Laxman Prasad Bhattarai. Senior economist, Dr. Dilli Raj Khanal presented the outline, objectives, and methodologies of this study. Based on the presentation, the experts shared their opinions and gave feedback for improving the effectiveness and robustness of this study. Some of the key issues that were identified during the PPD to be included in the research project include:

• Factors leading to low capital expenditure including the low spending capacity of government and quality of expenditure should be investigated.

• Poor planning as a result of lack of research, absence of sound implementation framework and substandard operational capacity due to absence of training should be one of the major aspects to be focused.

•Fragmentation of capital to invest on projects guided by personal interest, leading to sub-par completion of projects compromising sustainability issues should be investigated.

•Investment in unplanned and unmanaged infrastructural projects and lack of investigation due to non-performative monitoring facility of existing public financial management system should be investigated.  

•The need for a more scientific, evidence-based budgetary process to address the problem of allocative, technical and resource inefficiency should be focused.

•Poor implementation of planning due to lack of coordination between ministries in sectors relating to public expenditure should be highlighted.

•Reasons for lack of coordination between central government, federal state governments and local units in planning and implementation of budget should be investigated. 

• Much needed amendment in existing laws and policies to ensure smooth implementation of projects and gaps between existing policies and their implementation aspects should be thoroughly studied.

•Bureaucratic system of frequent transfers of officials and reshuffling of the personnel engaged in a particular office/project etc. hindering smooth functioning and implementations of plans and projects is a factor influencing poor public expenditure capacity which also needs to be investigated.

•Need to address the problem of inefficient revenue collection to manage resource crunch.

•Concerns relating to implementation of the “Project Bank” mechanism should be looked into.

•Additionally, the participants also provided suggestions on methodologies.


1. Hon. Santosh Chalisey (Chairperson, Finance committee, Parliamentary Committee)

2. Hon. Rajendra Kumar K.C (Member, Public Accounts Committee, Parliamentary Committee)

3. Hon. Biina Lama (Member, Infrastructure Development Committee, Parliamentary Committee)

4. Dr. Govinda Prasad Sharma (Secretary, MOALD)

5. Dr. Dilli Raj Khanal (Senior Economist)

6. Dr. Chandramani Adhikari (Former member, National Planning Commission)

7. Mr. Than Prasad Pangeni (Joint-Financial Comptroller, Financial Comptroller General Office)

8.  Mr. Padam Raj Poudel (Vice-Auditor General, Office of The Auditor General)

9.  Mr. Durganidhi Sharma (Former Secretary, Nepal Government)

10.  Dr. Teertha Raj Dhakal (Former Secretary, Nepal Government)

11.  Mr. Baburam Subedi (Joint Secretary, MOF)

12.  Mr. Lok Bahadur Karki (Director, National Statistical Office)

13.  Mr. Umesh Bindu Shrestha (Joint-Secretary, MOPIT)

14.  Mr. Prabhat Kumar Jha (Vice-DG, DOR)

15.  Mrs. Laxmi Pandeya Gautam (Program Director, National Planning Commission)

16.  Mrs. Laxmi Ghimire (Program Director, National Planning Commission)

17.  Mr. Kamal Prasad Bhattrai (Joint Secretary, MOFAGA)

18.  Mr. Rambabu Nepal (Vice President, Council of Former Public Employees of Nepal)

19.  Mr. Balkrishna Prasai (President, Council of Former Public Employees of Nepal)

20.  Mr. Rameshwar Khanal (Former Secretary, Nepal Government)

21.     Mr. Surya Prasad Upadhyaya (Under-Secretary, MOUD)

22.     Mr. Lekhnath Pokharel (Advisor, NARMIN)

Policy Research Institute

23.     Mr. Laxman Prasad Bhattrai

24.     Dr. Kalpana Khanal

25.     Dr. Mukti Ram Rijal

26.     Mr. Pranjal Rijal

27.     Mr. Rajendra Senchury

28.     Ms. Deeja Bastakoti

29.     Mr. Narayan Adhikari

30.     Dr. Deepak Kumar Khadka

31.     Mr. Kanchan Gautam

32.     Dr. Ashok Pandey

33.     Dr. Giriraj Sharma

34.     Mr. Biraj Dhungana

35.     Dr. Mandira Lamichhane Dhimal

36.     Ms. Jyoti Luitel

37.     Ms. Ashmita Rijal

38.     Mr. Sanjog Singh Kadayat

39.     Ms. Urmila Koju

40.     Mr. Kushal Thapaliya